Coronavirus has dominated headlines for months now, and the impact it has had on businesses across different sectors has been devastating. The wider impact on the retail sector has been widely discussed across the country. Moreover, the ongoing debate around mass unemployment, workforce crunch, rents, and uncertain future for many businesses has worsened the situation.
Along with an unusual human toll, the coronavirus pandemic has triggered a deep economic threat. The crisis caused by the virus is no more a looming threat for retailers but a harsh reality. It has caused disruptions at every stage right from the manufacturing to the transit timelines of the freight forwarders. The retailers struggling to meet the needs of both their workers and customers is now a common scenario in countries across the globe.
For many businesses depending on imports, the trouble began as early as January 2020 when the situation started to get worse in China. With the entire supply chain out of order followed by a prolonged lockdown that restricted the movement of non-essential commodities, even the stock that is ready with the retailers is not available for sale. March is the month of financial year closing and typically a period when many companies close higher numbers than usual, but everything got washed off this time.
According to the latest information on retail, the business has dropped by 20-25% by the end of February itself when the coronavirus panic just broke out in India. Talking about the revival, many businesses in the retail sector will perhaps take the longest time to recuperate to its full strength. Due to the widespread fear of catching the infection, many will avoid walking to the stores to buy products. However, e-commerce will be back on its feet much faster and may even see higher growth.
The businesses, in their fight against the pandemic with great commitment and vigor, are in full swing with their initiatives to ensure a safe environment for people around. Ensuring a high level of hygiene will become a key criterion for cards for everyone. Ramping up hygiene protocol, regular sanitisation of premises and also, sanitising the hands of every member entering the premises is inevitable. Some important measures include demarcated standing areas at entry and exit points, lifts, and restrictions on the movement of members between floors. Also, big retailers might need to ensure the compliance of members with shift-based or rotational work systems. They may also need to come up with a new regulatory framework.
The usually uncouth public is surprisingly compliant now. People are wearing masks and keeping each other at a distance for good measure. Everybody is well aware they face a dire threat. Businesses, big or small, would need to re-plan their outlets, ensuring that interactions do not result in infection.
Survivalists know the significance of two key traits: preparedness and resilience. Levels of preparedness and resilience will play a key role in determining a given organisation’s path out of the crisis and its workforce implications. Smart firms are keeping an eye on ways to return, as well as, opportunities for deeper restructuring to reinvent the business. It is clear that early adopters of digital tools are in better shape than others to face the challenges imposed by the coronavirus and prolonged lockdown.
The global pandemic is a catalyst for change and many firms' response to the pandemic has birthed unprecedented cross-industry collaboration. There have been outpourings of empathy and action to address the crisis. Digital skills, innovation, design thinking, and entrepreneurship will be crucial skills post-pandemic. The major challenge will be to sustain the hastily constructed infrastructure that fosters true ingenuity. Maintaining the momentum for change that the crisis has brought is a chance to focus on the skills that enable us to build back better.
Risk management, agility, and flexible working will now be an inevitable part of an organisation's decision making, especially when firms chalk out their business continuity plans (BCP). While the majority of firms will look forward to enhancing their Emergency Response Teams for future situations, chances are they will plan to create diversity in geographies and supply chains, increasing the opportunity for yielding returns. Expanding operations across geographies might work well for the retail sector.
New technological advancements and the growth of the digital space have led various sectors to embrace innovation and adaptation. The fast-moving consumer goods (FMCG) sector, in particular, has rapidly shifted in that direction by joining hands with the e-commerce industry. McKinsey reveals that e-commerce sales in the consumer goods industry are projected to reach $1.8 trillion by 2025, a fourfold increase from the last decade. In the face of intense competition and a high turnover volume in the sector, Artificial Intelligence emerges as a crucial differentiator in helping brands stay ahead of the curve.
Artificial Intelligence plays a vital role in bringing consumers closer to the brand. An ongoing challenge within the FMCG industry is for accurate consumer insights to enhance data-backed decision-making. Insights AI combines advanced AI technologies like Emotion AI, Behavior AI, and Generative AI, to ensure brands get in-depth consumer behavior data. These technologies help brands understand the expectations and preferences of target audiences and provide accurate data for efficient decision-making.
As with any other industry, consumer needs and expectations in the FMCG sector are ever-evolving. AI's ability to access and process vast data sets allows brands to tailor their marketing strategies quickly and effectively in line with the requirements of the target audience. With the inclusion of Insights AI, the Indian FMCG industry could witness a significant improvement in the cost and quality of products and services.
One of the most crucial aspects of any FMCG product lies in its ability to resonate with the consumer. Here is where understanding the emotions and behaviors of the consumer towards the product becomes important. Insights AI plays a vital role in bringing these insights closer to the brand in several ways.
Insights AI can create exceptional value for the FMCG brands thriving in e-commerce. 29.1 percent of consumers believe that AI can be better utilized in providing personalized product recommendations, while 33 percent agree on its function to provide optimized search results. It can decode an individual’s purchase history and demographic information to create personalized shopping experiences for its consumers.
As one of the industries undergoing a major change due to Insights AI technologies, let us look at some of the ways it is creating a difference today.
1) Consumer Research: Insights AI can gather data and feedback on the path to consumers' purchase journeys- from looking at a product ad to completing a purchase on a website. It helps provide deep, unbiased insights, which ultimately provide a seamless shopping experience.
2) Marketing Communications: FMCG can benefit immensely in creating targeted and personalized campaigns that truly resonate with their target audience by understanding what consumers like and dislike.
3) Content and Media Testing: Brands can optimize the visual appeal and engagement across various content formats, such as ads, videos, social media posts, etc., by testing content and media pre and post-launch.
4) Pack Design and Shelf Placement Testing: FMCG brands can test their pack designs and shelf placements using Insights AI, which analyzes the shopper’s purchase intent, stopping, holding, and closing powers to make products stand out.
5) New Product Development: Validate your concepts, opinions, and ideas before a new product is developed to ensure that you are not completely relying on your gut instinct and guesswork.
While AI has a huge potential for FMCG brands to scale and improve, its widespread adoption also raises concerns about data privacy and ethical considerations. The heavy reliance on consumer data for insights also means transparency is a key priority in AI.
AI-led disruption in the FMCG sector is not just a possibility- it is already happening. From optimizing strategies to personalized recommendations, AI is leading the way for the FMCG sector to thrive- in the e-commerce space and beyond. With the continuous evolution of technology and fierce competition in the market, the need for products and brands to stand out is imperative, especially among FMCG players. As such, brands must remain agile, adaptive, and customer-centric in their approach toward AI to deliver meaningful experiences for the end consumers.
Ranjan Kumar is the Founder and CEO of Entropik – research integrated platform powered by AI. He is an engineer from IIT Kharagpur, has invested most of his time working with soft computing, neural computing, and deep learning. Ranjan has worked with distinctive firms like ONGC Ltd and ITC Ltd, after which he turned an entrepreneur with Oyeparty.com in 2012. He has also headed business at Citrus Payments, a fintech company, giving the division exponential growth under his leadership.
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